FINANCING FARM CROPS

Evening Star, Issue 19326, 12 August 1926, Page 9

FINANCING FARM CROPS

New Zealand’s facilities for shortterm credit arc adequate in the opinion of the Commission, but it is necessary to bridge the gap between that and long-term credit. To provide for orderly marketing credit, as a means to orderly marketing, is as important as _ the provision of the capital required in the purchase and operation of a farm. Realisation of agricultural products is intermittent and irregular through price fluctuations attributable to seasonal conditions, ovorsupply, trade depression, . interrupted communication, and ■ other unforeseen causes. The need is created not only for intermediate credit, but also for intermediate storage, regulated in such mannor as to render the produce stored an acceptable security. The length of the period of turnover, and the fact that marketing is largely a seasonal operation also affects the situation. The farmer's return for his produce is often affected by the pressure of fmancial circumstances, which! force him on the_ market at a moment when it is prejudiced by the conditions already referred to. Short-term or intermediate credit can often bo judiciously employed to prevent undue hardship, but orderly marketing must not be confused with speculative holding. The farmer may ho assisted to avoid exaggerating the conditions of a depressed market by overloading it; but, on the other hand, precautions must he taken to prevent the misuse of credit by speculators or these who wish to avail

themselves of it in the hope of realising '■ Unwarrantable' expectations as to price.. It.is .not proposed that, intermediate credit should he based o> land security, although" there should bo no obstacle in the way of a borrower who desires to offer such security. The intention is, rather, to take tho equivalent to a chattel mortgage upon stock, produce, equipment, and personal notes, at tho discretion of tho Credit Board. In order to overcome tho inherent weakness in tho chattel mortgage system, it'is suggested that legislation bo drafted in proper form providing the necessary amendments ior extending tile State Advances Act to provide additional credit for fanners and for a: 'Warehouse Act providing for tho licensing and bonding of public warehouses, storing agricultural products, under conditions intended to establish tho integrity' of their receipts, and make those receipts generally acceptable as. security for loans.